Rail freight transport in Austria is going through a challenging phase. Although the number of train kilometers traveled on the domestic rail network has recently increased slightly, this development is not attributable to an economic upswing.
Rather, numerous construction sites and renovation projects on key sections of track are forcing railway companies to implement time-consuming and costly detours. At the same time, competitive pressure in the market is intensifying: while road freight is gaining market share, the state-owned freight division of the Austrian Federal Railways, Rail Cargo Austria, is gradually losing market share to private competitors.
Development of market shares and competition on the main axes
The rail freight market has fundamentally changed in the past decade. Ten years ago, Rail Cargo Austria, a subsidiary of the Austrian Federal Railways, held a market share of over 75 percent, measured by gross ton-kilometers. Most recently, this figure has fallen to around 54 percent.
Particularly in the area of block trains, where entire trains are assembled for a single customer and transported directly from origin to destination, a significant shift is emerging. Around two-thirds of this market segment is now served by freight railways outside the ÖBB Group. The state-owned subsidiary's sole domain remains single wagonload traffic, where individual wagons from different clients are combined to form train sets. This logistical undertaking is considered economically challenging and loss-making within the industry. To support this service, the company received €58 million in state subsidies in 2023, which corresponds to the total amount received by all private rail transport companies combined for their services.
Private providers also hold a dominant position on the most important transit routes. On the Brenner Pass and the western route, which carries a fifth of Austria's freight volume, companies outside the state-owned rail network achieve market shares of more than 60 percent. This means that two of the three main corridors are predominantly controlled by competitors. Private companies also proved more adaptable in the area of short-notice transport bookings, the so-called ad-hoc services.
Financial burdens and operational framework conditions
The financial situation of the state-owned freight railway reflects market dynamics. Despite public subsidies, losses in the past two fiscal years totaled more than €160 million. Market observers expect that reaching profitability will remain a challenge in 2026 and 2027.
In addition to economic factors, there are significant infrastructure limitations. The annual report of the regulatory authority Schienen-Control identified 126 multi-day construction sites on the Austrian Federal Railways network alone, reducing available network capacity by more than 30 percent. Furthermore, extensive renovation projects are underway on international routes, particularly on corridors through Germany.
The need to bypass construction sites means that trains sometimes have to travel two or three times the distance to reach their destination. While these extra kilometers increase the statistically recorded operating performance, they significantly burden the balance sheets of railway companies. The longer journey times result in increased expenses for traction energy, personnel, and track access charges.
Decline in connecting railways and dynamics in the freight mix
Another indicator of developments in rail freight transport is the number of active sidings at industrial plants. The number of operating sidings with direct goods handling recently fell to 488. Of these sidings, 60 had very low throughput of fewer than 20 freight wagons per year. The total volume of goods handled on the sidings decreased by 1,2 percent to 1,16 million freight wagons.
The structure of this traffic reveals a strong concentration: half of the total railcar volume is attributable to just 16 industrial companies. The largest single volume is recorded by the steel company Voestalpine in Linz, with around 180.000 freight cars per year. This concentration illustrates the direct link between rail freight transport and the economic situation of heavy industry and the manufacturing sector.
At the same time, the demand structure for transported goods is changing. Traditional bulk goods such as coal or fossil fuels are losing market volume as a result of structural changes. Fluctuations in industrial production lead to inconsistent transport needs, which makes it more difficult to utilize freight trains effectively.
Comparison of the transport mode model and outlook
In an intermodal comparison, Austria continues to have a comparatively high share of rail in its total freight transport within Europe. The rail modal split is around 26 percent. By comparison, the average within the European Union is approximately 17 percent, while in Switzerland the rail share is estimated at 69 percent.
Road freight transport benefits most from existing capacity bottlenecks and price pressures on the railways. Truck transport scores points during periods of network disruption due to its flexibility and direct routing without detour surcharges.
At the regulatory level, negotiations are currently underway regarding the European Capacity Regulation. This initiative aims to allocate high-quality train paths to rail freight, even for short-notice capacity requests, as freight trains are currently generally given lower priority than passenger trains in operational practice. The future development of the sector depends significantly on how efficiently the planned infrastructure measures are implemented and whether the organizational framework can be adapted.